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Mr. BOONE. Yes; a great many in South Bend. We are an industrial city. It is one of the automobile centers. A number of plow concerns are located there, as well as the Singer Sewing Machine Co. Our industrial class has been without employment a great deal for the last two and a half years, so things are very serious. We are on demand notice now and have been for six months.

The first part of June we had eight banks fail. Consequently, the receiverships and liquidating agents are calling in their loans very rapidly now. There is not a day passes that some man or woman does not come to my office and apply for a loan, and we advise them that we can not take care of them. They will break down, in fear of losing their homes. A good many of them are losing their homes.

Senator Watson. So that your building and loan associations are for this measure?

Mr. BOONE. Yes, sir.
Senator WATSON. The general purpose of it?

Mr. BOONE. Yes, sir. There is just one thing I want to state here, Senator, and then I shall be through. We had a fine gentleman from Indiana make a statement before this committee a few weeks ago advising this committee that he had been looking for good loans in South Bend for quite a while, but could not find any, which is untrue. There is great demand for loans in South Bend. I suppose we could make thousands of loans right now if we had the money.

I had only a few hours before I knew that I was to be here. I called on one of our contractors, a supply man, and he said he could build 25 homes for individual owners right now if he could get the money, but he can not get it. We have had heavy foreclosures, and it is impossible to get money in South Bend to take care of these people who want to pay for their homes.

Senator Watson. Have you anything special you want to say about the bill, or any comments on it?

Mr. BOONE. No; nothing in particular, except that we are in favor of the bill.

Senator Watson. All right. We are much obliged to you, Mr. Boone.

Mr. Sherlock.



Senator Watson. Will you please state your name and occupation!

Mr. SHERLOCK. Chesla C. Sherlock. I am the managing editor of the Ladies Home Journal.

Senator Watson. Mr. Sherlock says he wants to get away, because he wants to broadcast. Is that right?

Mr. SHERLOCK. Yes, sir; and the title of the broadcast is, " Buy a home now," Senator.

I might say in the beginning that I am not one of those who is · for this bill, but—," I think you could be for it, and “but” it out of the window.

Senator Watson. What is your special interest in it, Mr. Sherlock?

Mr. SHERLOCK. Senator, I have been an editor for 11 years. The first year I was editor of a farm paper in the State of Iowa. Then

I was the first editor of Better Homes and Gardens for five years, and for the past four and one-half years I have been with the Curtis Publishing Co., and am at present managing editor of the Ladies Home Journal.

During all that time I have been interested in doing what I could to encourage an increase in home ownership in this country. It has seemed to me, during all that period, that there was nothing that I, as an editor, seeking to serve the homes of the country, could do that would be more constructive to all interests, than to try to increase the percentage of owned homes. That is my interest, Senator, and, if I may say so, I am here in the interest of the thousands of women who have written me during the past 10 years, particularly on this subject, “How can we get a home? " Out of all that experience, it has come down to one thing, the question of finances.

You can buy everything under God's sun in this country but a home, and buy it easily and on any kind of terms. But when you try to buy a home, you must have, first, at least from 10 to 25 per cent in cash. Then you have to go out and find somebody who is willing to take a first mortgage for 50 per cent of the remainder. Then you have to scout around and find some one else who will condescend to take a second mortgage on the balance, at a discount of from 20 to 35 per cent.

I would like to ask here, how much business could be done in this land, in the automobile industry, in the furniture industry, or any other of the industries that have gone ahead in the last 80 years, if it was necessary to finance your purchases on that kind of a basis? It is the biggest disgrace we have had in the Nation. Do you know that we had a higher percentage of owned homes in 1850 than we have to-day, and during that interval of 80 years we have increased our population five times, and our national wealth fifteen times ?

Why is it that there has been a slump in home ownership? It has not been a lack of incentive, or a lack of will for a home, or desire for a home. I found that out in the past 10 years. I have 17,000 letters in my office that I thought once I would carry down here and show you, that I have accumulated.

Senator Watson. We are glad you did not. [Laughter.]
Mr. SHERLOCK. They are at your call if you wish them, Senator.
Senator Watson. We will take your word for it.

Mr. SHERLOCK. So, it is not lack of desire for a home. You can ask any one of the 250,000 to 500,000 young women establishing new families every year in this country where they would rather start, in a home of their own, or in an apartment, or a rented house, and there is only one answer. There is not one of them who is honest who would not say, “I would rather have a home of my own."

You do not have to sell that idea to the people of this country.

Senator WATSON. That is very interesting. I thought nearly all the youngsters that go married nowadays, especially in the cities, wanted to go into an apartment.

Mr. SHERLOCK. Some of them do. Honestly, I think from 20 to 25 per cent of our population should never be in the home-owner class, because of occupation or because of economic conditions, but I do think it is possible to raise the percentage of home ownership im this country up to at least 75 per cent. At present only 45.6 per cent of our families are home owners.

Senator WATSON. And that is a question of finances !
Mr. SHERLOCK. A question of finances, absolutely.

I have been diverted here a little bit. If I may, I would like to give you briefly the reasons why I am in favor of this bill. I have outlined them here on two sheets of paper.

I am in favor of the proposed home loan bank system for two major reasons: First, because of the effect for good it will have upon the present situation; and, second, because of the good it will foster as a permanent feature in our financial structure.

Let us take up the present situation. It will relieve the present situation as it affects the small home owner, first, because it will enable many home owners to save their homes from needless foreclosure.

I am not in the banking business. I have no connection with it whatever, except as an occasional borrower. Nor am I in the mortgage loan business, the building and loan business, or anything else. But I have had letters coming from all over the country from people saying, “How can we do our share to bring prosperity back when we are about to lose our home?"

Our own family physician has had the first mortgage on his house called, to the extent of $7,000, and he is in the same position everyone else is. He can not collect money that is due him, and yet he is going to lose his home, his office, and everything else, and be more or less, in his mind, at least, a disgrace to the community because he was caught this way, through no fault of his. And that is the situation that exists all over this country. That is point No. I.

It will save a good many homes from being foreclosed.

The second point is that it will relieve the situation right now, so far as the small home owner is concerned, because it will encourage the construction of new homes by citizens who wish to invest the remainder of their savings in the safest investment of all-a home.

The second major point coming under the present situation is that it will start the wheels of industry to moving. It seems to me that that is the biggest thing, so far as the immediate present is concerned. The building industry is our key industry, so far as the absorption of foodstuffs, raw materials, and labor is concerned.

Nineteen hundred and twenty-six was the last normal building year we have had, because residential building was on a fairly normal basis, and in 1926 the building industry as a whole paid out a labor bill of $3,000,000,000. It will start the wheels of industry to moving, because, first of all, as I pointed out in the original statement, there is a widespread demand for home construction and remodeling, and particularly right now is there demand for remodeling.

In the Ladies' Home Journal we have published articles descriptive of the effort that is being made in the cities of Muncie, Ind.; Rochester, Columbus, Wilmington, and numerous other cities, along this line of home modernization. In Rochester alone the women of the community went out--and, Senator, here is where the women come into the picture—the women of the community went out with pledge cards and secured over 60,000 hours of work for labor alone, in the remodeling of homes, primarily in rehabilitation. There is a demand, but they are stopped everywhere by the statement,“ We have not the money.

Some people are able to pinch out $5 to have a screen door fixed, or something like that, but they would do a great deal more than that if financing facilities were adequate.

The second point under that heading is this: I want to deny emphatically that we are overbuilt. We are overbuilt only on obsolete houses, apartments, and tenements that are insanitary, unwanted by real Americans, and a disgrace to our ideal of home life.

Senator, I lived in the city of Des Moines for 15 years, and I was proud of the fact, and Des Moines is proud of the fact that it had the highest percentage of home ownership of any class A city in the United States—51.1 per cent of the families in that city owning their homes—and yet, according to a survey that was published in Fortune magazine only last month, it was found recently that out of the eighteen thousand and odd dwellings in that city, 5,000 of them did not so much as have running water or plumbing facilities of any sort !

We are overbuilt on that kind of houses; yes. And it seems to me that any attempt to maintain the status quo, to protect an investment in something that is obsolete, is a national disgrace.

The third point under that heading is that we have a constant need for at least 250,000 to 500,000 new homes per year to take care of the increase of new families alone. We have not built these in recent years. As I said before, the last normal building year we have had in the building industry was 1926. There has not been the necessary amount of residential construction since 1926.

Senator Watson. What is the reason we did not go on building in 1927, 1928, and 1929 ?

Mr. SHERLOCK. That is my next point, if you please, Senator. Senator WATSON. Certainly.

Mr. SHERLOCK. The building industry shows that clearly. That is why the prices of materials are down now. There is no demand for them because of lack of money.

What is the situation so far as the larger cities are concerned ? Cambridge Associates, a statistical organization of Boston, announced only the first week of this month, February, 1932, that a survey had been made in 50 of our larger cities to see whether there was a condition of overbuilding, and whether space was needed. It was found that the need for new space right now, this month, amounted to $40 per capita in those 50 larger cities. If we spread this average over the entire country, it would indicate a need right now for $4,800,000,000 worth of new construction.

Personally, I think that is only about half what the amount should be, because there are thousands of small communities where no new construction has been undertaken in several years past, and it is perfectly obvious to any person who travels over this country, as I do. Let me say that for the last year I have traveled over the country on business 136 working days, and I have traveled over 50,000 miles, primarily on this very thing, on the building side and the homemaking side.

Senator Watson. When you got into a town, how did you investigate that, Mr. Sherlock?

Mr. SHERLOCK. First of all, if you do not see a new excavation made for a basement anywhere, you know there is no new building going on. That is the first thing I look at, when I come into a town, in the outer edges of the town,

where the newer construction naturally would be found.

The next thing has been to confer with the leaders in the building industry, and in the building materials industry, and ask them, “What are you doing? Where is your business good! Where is it bad?

And so forth. I also conferred with chambers of commerce secretaries. In many communities they have home modernizing bureaus. For the past three or four years they have been trying to save the building industry, or at least keep their labor employed, by a rehabilitation campaign. Conferences were held with advertising men, and so on down the line each and every angle, financing, building and loan people, bankers, in many instances, and from our readers themselves, because that is the surest way to keep your finger on the pulse of the Nation, and know what is going on, from what they write you and tell you. We editors have a saying that if one reader writes and tells you so, there are at least 100 others who think so but do not write and tell you.

The fifth point under the heading of starting the wheels of industry moving is that right now we need to encourage more of our families to buy homes, and I believe (supplementing the point that we are not overbuilt, as I said to you in the opening statement) we are not overbuilt at all until we have at least 75 per cent of our families living in their own homes. When we get up to that point, and have in addition a 5 per cent surplus, then I am willing to listen to you on the statement that we are overbuilt.

The third big reason why I think it is essential right now as an emergency proposition is that existing credit facilities for home financing have ceased to function to any appreciable extent to-day.

I think the testimony I have listened to the last two days brings that out adequately. There is no money available for new construction or rehabilitation. The very gentlemen who have come here denying that we need this system are in a position to know how true this is.

Let me say that this demand is being throttled at its source by the refusal or inability of bankers and mortgage loan companies to provide the money. The whole thing heads back to finance, Senator. And, in addition, there is no money available to-day for the protection of the short-term mortgagee whose mortgage has been called and who is about to lose his home.

I would like to talk, if I may, with your indulgence, on the permanent benefits that I see following the introduction of this as a permanent segment of our financial structure.

First of all, it will encourage home ownership by extending continuing financing facilities in this direction. One of the gentlemen this morning brought out a point that I have seen over and over again in my experience in the past 10 years, and that is that it is the stop-gaps that come now and then that dam up this demand, this normal continuing demand for homes, that causes your booms every so often, that cause your overexpansion, that cause, in large measure, many of the evils that exist in the small residential field, such as “jerry” building, speculative building, building of houses that are only worth 20 cents on the dollar, if that. We need this as a continuing thing, because if the flow of credit in this field is

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